The benefits of ethical leadership

by Managing Values on September 6, 2016

To date, traditional business leadership models have paid only lip service to managing the social context in which business operates. In so doing, today’s business leaders may be missing a golden opportunity to “future fit” their organisations and leverage technologies to create workplaces where employees thrive because their social needs are being met.

Many recognise that today’s mainstream business models are out of sync with the technology innovations that have dissolved corporate walls and knitted suppliers and consumers into a sharing economy such as Uber, Airbnb or Crowdfunding.

Old ways of thinking and doing are sabotaging many organisations’ business success. The new ethical leadership model required to release employee discretionary effort is very different from the past. Specifically, it puts employees first and outputs a by-product of their engagement levels.

Identifying the social purpose of the organisation beyond shareholder needs so employees can feel good about the organisations they work for and also find their place in the larger picture of how business can be a force for social good.

Purposely designing an organisational culture where known risks are eliminated and leaders have forearmed and forewarned employees of the ethical challenges they will inevitably face.

Holding leaders accountable to ensure their employees are fully engaged. To date this has been a critical leadership skill that has gone unmeasured. This failure has meant, as Gallup revealed in 2013, that only 13% of the global workforce is engaged at work because the organisational cultures they work in do not meet their social needs. Since we have the tools and knowledge of what motivates employees, ethical leaders need to leverage this knowledge to design a culture that enables employees to fully contribute their diversity of skills and willingly collaborate with each other to ensure the sum is far greater than the parts.

Thankfully, ethical leadership is very different from leadership as usual. If leaders fail to step up to the new ethical leadership model, we can expect new employees to continue to vote with their feet and leave their employers after one or two years in search of more fulfilling work.